BusinessDay... the voice of business: Myths about marketing a new business

Myths about marketing a new business
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OLUYINKA ALAWODE on 09 April, 2008 12:00:00
 
After six months of test-running his business, Tony and his consultant are
satisfied with the acceptability of his product in the market. The idea of
running the business by producing the instant foods on a very small scale was
brought by Shina, Tony’s tycoon friend.
Tony’s consultant welcomes the idea. She says the best kind of market
research is having people use the product first and then finding out their
perception or acceptance. She cites the example of instant pounded yam. “Many
people, particularly, women welcomed the idea. It is indeed a good idea.
However, the acceptance of the product in the market has not been as high as
expected. This is because most people insist that they prefer their pounded yam
freshly pounded after the boiling of yam. This instant meal is used only on a
limited scale in many households. Women that are too busy to pound yam would
rather get a domestic help to do the pounding than use the powder except they
have no choice. Also at food preparation for parties and some fast food
restaurants, there are people whose jobs are specifically to pound yams.
Preparing a meal of pounded yam is as close as the tuber(s) of yam in the
pantry.”
She says, “On the other hand, fufu powder has greater acceptance in homes and
restaurants. Storing the fufu in the raw form is often not palatable as it emits
a bad odour after sometime in storage. Also, the process of preparing it from
cassava is tedious; therefore many households prefer to use the powder.
The consultant says the market potential of some new products can only be
clearly determined when the product has actually been brought to the market. So,
the idea of initially establishing such a business on a very limited scale will
avert huge capital losses.
In his product line, Tony now knows the items that have good market potentials
based on their acceptance in the market. He now feels more confident about his
success and decides to expand his product line. With the results from the
test-running, he and his consultant update his business plan. He is certain he
can now access funding from a lending institution if he wants to.
The consultant also says it is this uncertainty about the success of a product
in the market that makes many lending institutions shy away from funding
start-ups. Tony decides that henceforth his advice to people who have great
ideas but cannot get funding is this: ‘Start with whatever you have and find
out how greatly accepted what you believe is great is with your target
customers.’
Marketing
To market his new business, his consultant tells him to;
Always conduct market research- people’s tastes do change. Do not assume
people will like in five years’ time what they like today. If you want to make
new additions to your product line, market research is also necessary. It is
wrong to conclude that since customers like the other things you already offer,
they will like every other thing you bring to the market.
Reward all your loyal customers – make people feel special for patronising
you.
Always use colourful and attractive promotional items - you may not be able to
give your products free because of the costs but you can give them materials
such as fliers, brochures, complimentary cards, banners and design a website
that would attract new customers and sustain the interests old ones.
Study your competitors - don’t let them take you by surprise, so that no
matter what they offer, you are always ahead.
Ensure your products are always available - for instance, if you advertise in a
national daily, your products must be available nationwide. If not, restrict the
advert to only the area your distribution network covers except you are sure you
can expand your distribution network nationwide.
Ensure excellent service/reputation -Customers keep you in business, treat them
all, including potential customers as kings. Your company must maintain a good
reputation in the area it is operating. One of the ways is to make sure you do
not pollute the area and do things such as paying to have the area cleaned or
other simple things as a form of corporate social responsibility. If your firm,
as small as it is, do good things within the locality, you will get noticed.
Have an optimistic attitude: no matter what happens, you must always believe
you can succeed.
Tony finally tenders his resignation letter. His resignation is causing so much
stir within the organisation. Some of his colleagues and superiors begin to ask
him what his next line of action is. “Has he a better job?” They ask. On
discovering he intends to start his own business, they tell him he is out of his
mind to give up such a plum job willingly to embrace the uncertainty of starting
a business afresh in a country with such a tough business terrain.
Motivation
It dawns on Tony why there are so many frustrated businesspeople. Many of them
are not in business to fulfil a vision so strong in their minds that they cannot
but embark on it. They are in business because they were retrenched or were not
satisfied with the benefits or remuneration from their jobs or some other
selfish reasons. “If money or material benefit is the only motivation for
starting a business, it will surely drive the entrepreneur to frustration, not
fulfilment and ultimately failure,” Shina, has warned him.
Be decisive
The chairman of the company summons Tony. He offers him better remunerations at
his job. Tony thanks him, expresses appreciation but declines the offer. Shina
has warned him saying “If money and better conditions of service can make you
change your mind or delay your decision to embark on your business, you are not
ready for entrepreneurship, better stay in paid employment and make the best out
of it. Entrepreneurship is not a soft option; it is a hard determination to
succeed no matter what you experience as you tread along the path. Success is
its ultimate aim but it often comes with a heavy price.”
Tony’s immediate boss also calls him and appeals to his emotions. “How do
you expect me to survive without you, you can’t possibly do this to me,” she
says. His head swells at hearing he is needed so much. But he decides that
fulfilling his calling through entrepreneurship is more important. Since he has
learnt from Shina not to slam doors as he makes his exit from a place, he is
very gracious and as he reaffirms his determination to leave the company.
Burn the bridges
Finally his boss says, if you cannot make it and you are in need of a job, you
will always be welcomed back. “No,” Tony says emphatically. “I am never
coming back to this company as an employee. If at all I return it would be to
conduct business with you.” He is simply taking Shina’s advice: “Never go
into business with the possibility of failing. You test-run a business, not
because you expect to fail but to minimise risks, know how to succeed and to
become more confident at what you have set out to do.
Communicate the vision
His confidence during his remaining working days at the office started making
his colleagues and superiors believe he could make it. Tony realises the process
of communicating his vision and getting people to buy into it has started.  One
of his bosses begins to show interest in investing in Tony’s prospective
company.  Tony sees how right Shina is when he says, “Nobody wants to
associate with failure. If you talk about your vision with pessimism, it will be
difficult to get anyone to buy into it. Talk faith not because you want to
deceive people, but you strongly believe you will succeed. The marketing of a
new business should start even before your product enters the market. You must
get people to accept that the business you are establishing has come to stay for
good so that people concerned would want to be allies rather than withhold their
support indefinitely until it they can see it would succeed.
Build relationships ahead
Tony has always been a relationship person. It is better to start getting to
know people while you are still within self-employment or before you start your
business. Then they would not know you are a potential employer or business
associate. Of course, people outgrow certain things and changes occur as a
result of exposure to education. But it is usually better to work with people
you already know. If you do not know them, find out from people who know them.
You can sink your business ship with all the fortunes it contains by associating
with the wrong people when you are in self-employment.